MFs log 1st outflow in 21 months, invest Rs 70K cr in FY16

Logging their first net outflow in 21 months, mutual funds have pulled out nearly Rs 5,200 crore from stock markets in March on profit booking, although for the entire fiscal ending March 31 they have invested more than Rs 70,000 crore. This was the first outflow since May 2014, when MFs had pulled out Rs 1,078 crore. Prior to that, they had been continuously infusing money in stock markets. Despite the huge outflow in March, MFs registered a big net inflow of Rs 71,000 crore in the financial year 2015-16, ending this month. “The reason for the huge outflow by MFs in the stock market could be two-fold. 

Firstly, since it is the financial year end, a lot of banks and corporates would have pulled out their investments to balance their books and meet the cash flow requirements,” Wealthforce.com Founder Siddhant Jain said. “Secondly, the market is up about 8-8.5 per cent since a month ago. So a lot of investors, mainly institutional, could be doing some profit booking and exiting their mutual fund positions, leading to outflows,” he added. According to latest data with the Sebi, fund managers have offloaded shares to the tune of Rs 5,196 crore so far this month (till March 22).